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April 11, 2004

Initiatives Would Create Jobs, Lower Fuel Prices, and Improve Illinois’ Economy

SPRINGFIELD – Governor Rod R. Blagojevich sent a letter Friday with Minnesota Governor Tim Pawlenty (R) on behalf of the Governors’ Ethanol Coalition urging President Bush to support new ethanol requirements and ethanol tax credits as a part of any new energy legislation this year.  Governor Blagojevich serves as chairman of the national Governors’ Ethanol Coalition, which represents America’s thirty ethanol producing states, while Governor Pawlenty is vice-chairman.  Governor Blagojevich stressed his support for two specific proposals. 
“Congress has the opportunity this year to make great strides in our nation’s energy policy,” said Governor Blagojevich.  “They can enact legislation that accomplishes the crucial goals of creating jobs, providing for a cleaner environment, and weaning our dependency on foreign oil while promoting an important renewable fuel made right here in America.  These initiatives will have a tremendously positive impact on Illinois, where ethanol production is a vital part of our agricultural economy.”
The Renewable Fuel Standard (RFS) would be a national requirement that boosts total ethanol use to five billion gallons annually by 2012, roughly twice the current utilization amount.  The U.S. EPA would set ethanol utilization goals for individual refineries in order to reach the national standard by 2012. The RFS provides a logical roadmap for reducing consumer fuel prices, increasing energy security, stimulating rural economies and generating jobs.  The ethanol and oil industries, agricultural groups, consumer groups and various states all endorse this standard.  The RFS not only supports a renewable energy alternative to imported oil, but also contains provisions to eliminate within six months complex rules that currently lead to production of many “boutique” fuel blends for different markets.  Elimination of the need for these boutique fuels will increase the flexibility of refineries to serve multiple markets and produce lower costs for consumers.
The Volumetric Ethanol Excise Tax Credit (VEETC) mitigates a serious flaw in the existing alcohol fuels tax credit.  The existing motor fuel tax credit reduces federal highway trust funds for states like Illinois that use significant amounts of renewable fuels such as ethanol.  Passage of the VEETC would stop penalizing ethanol and would bring almost $1.9 billion in additional highway trust fund dollars to Illinois over a 6-year period, allowing the state to improve infrastructure and create jobs.
The letter, sent by Governors Blagojevich and Pawlenty on behalf of the 30 governors represented by the Governors’ Ethanol Coalition, urges President Bush to “impress upon Congress the importance of passing energy legislation, including the RFS and VEETC, this year.”
Governor Blagojevich tied his support for this federal legislation to his innovative Opportunity Returns plan here in Illinois: “Opportunity Returns is all about finding creative ways to create jobs and build our economy.  We are focused on finding new opportunities for Illinois farmers, and also in preserving and enhancing the environment for future generations,” said Governor Blagojevich.
The Opportunity Returns regional economic development plan is the most aggressive, comprehensive approach to creating jobs in Illinois’ history.  Since a one-size-fits-all approach to economic development just doesn’t work, the Governor has divided the state into 10 regions – finding areas with common economic strengths and needs, and developing a plan with specific actions for each region.  This grassroots effort is a product of significant outreach over several months with business, civic and labor leaders, and elected officials.  Opportunity Returns contains tangible actions to make each region more accessible, more marketable, more entrepreneurial and more attractive to business.  Each plan is tailored to deliver real results that local businesses will see, feel, and, hopefully, profit from.  The Governor has already unveiled plans for six of the ten regions – Northern Stateline, Northwest, Southern, North Central, Southwest and West Central regions.  He will announce the plans for the East Central, Southeast, Central and Northeast regions in the coming months.
April 9, 2004
The Honorable George W. Bush
President of the United States
The White House
1600 Pennsylvania Avenue NW
Washington, DC  20500
Dear President Bush:
The Governors' Ethanol Coalition, which represents 30 governors throughout the nation, would like to reiterate our strong support and sense of urgency for passage of the Renewable Fuel Standard (RFS) during the 108th Congress.  Creating an RFS provides a logical roadmap for reducing consumer fuel prices, increasing energy security, stimulating rural economies and generating jobs.  Domestically produced renewable fuels such as ethanol and biodiesel can help meet a percentage of our nation’s fuel needs.
The RFS fuels agreement accomplishes a number of objectives and is supported by the ethanol and oil industries, agricultural groups, the environmental community, consumer groups and states.  First, it provides refiners with increased flexibility which will reduce fuel costs in the marketplace.  Second, it provides both agriculture and the renewable fuels industry with significant domestic growth opportunities.  Third, it will help add over 200,000 new jobs and will protect the environment through a ban on MTBE and strong antibacksliding language.  A majority in Congress support the RFS fuels agreement, and we urge you to do what you can to ensure that this important legislation is enacted into law this year. 
We also strongly support the Volumetric Ethanol Excise Tax Credit (VEETC), which mitigates a serious flaw in the existing alcohol fuels tax credit.  The existing motor fuel tax credit reduces federal highway trust funds for states that use renewable fuels like ethanol.  This is obviously counterproductive for a country that is trying to create new jobs, improve its infrastructure and reduce its dependence on imported oil.  It is critical to the states that VEETC is enacted into law this year.
In the meantime, we must not undermine the existing Federal Reformulated Gasoline (RFG) Program with its oxygenate requirement.  This program has improved air quality in every ozone non-attainment area across the country.  California and other states have already addressed concerns about MTBE by using ethanol, thereby protecting drinking water supplies without lessening the air quality benefits of the federal RFG program.  Importantly, replacing MTBE with ethanol in these states has been a seamless transition without negatively impacting consumer gas prices. 
The Federal Reformulated Gasoline Program requires both performance standards for emissions and requires oxygenates.  This combination yields significantly greater air quality benefits than either would alone.  Historically, the U. S. Environmental Protection Agency has recognized the air quality benefits of oxygenates and ethanol in gasoline, including reduced emissions of fine particulate matter, carbon monoxide, hazardous air pollutants, air toxics, and ozone precursors.  Simply waiving the use of oxygenates in RFG, without sufficient air quality protections as provided in the RFS fuels agreement, could result in serious environmental backsliding.  The passage of the Renewable Fuel Standard would be a simple solution to this complex problem.
Please accept our thanks for your leadership on energy issues and your support for ethanol and biofuels specifically.  We urge you to impress upon Congress the importance of passing energy legislation, including the RFS and VEETC, this year.
Rod Blagojevich, Chairman                                                Tim Pawlenty, Vice Chairman
Governor of Illinois                                                               Governor of Minnesota


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